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At the Forex currency market the British Pound Sterling rate is traded downward on Monday, as investors took a break to analyze and draw a deduction from the facts of the stream of news last week.

Forex forecast: MACD indicator for the pair GBP/USD is growing in the negative area, shaping a buy signal. Stochastic Oscillator is changing direction again in the neutral zone; now it moderately goes upward, giving a buy signal.

Forex recommendations: off the market.

Feasible event scenario t Forex: in case of break down at the level of 1.6005, target for the sale will be the levels of 1.6000 and 1.5990.  If downward breakdown does not take place, the pair will stay at the current levels.

It became known this morning that index of consumer confidence Lloyds in the UK fell to -72 points in October against the level of -67 points a month earlier. It is a negative signal reflecting among other things, negative impact of the European debt problems.

A meeting of the Bank of England will be held this week. It is expected that interest rate will be kept unchanged at the level of 0.50% per annum. The follow-up comments of regulator about general economic situation and inflationary pressure may be of interest.

Meanwhile, Member of MPC Mr. Dale says earlier that he expects sharp decline in CPI at the beginning of 2012. According to Mr. Will, a representative of the Bank of England and MPC, British economy demonstrates slow growth rate and a chance of recession in Q4 would not be a great surprise. Representative of the Bank of England Mr. Bean said earlier that growth rate of the British economy is slowing down in the second half of the year and he believes that real spending of the households will fall even more  significantly in the second half of the year.

The head of the Bank of England, Mervyn King anticipates sharp fall in inflation in 2012. CPI in the UK rose by 0.6% m/m (+5.2% y/y) in September against the growth of 4.5% y/y in August. Obviously, inflationary pressure has soared upward, which creates new impediments to economy. We would remind that at the meeting in October the Bank of England decided to leave interest rate unchanged at the level of 0.50% per annum, at the same time, they increased volume of asset redemption program. Therefore, QE was increased to 275 billion pounds against the previous level of 200 billion pounds. In the follow-up comments the head of the Bank of England Mervin King said that the expansion of the asset redemption program has been provoked by the slow growth of the global economy, however QE will have a positive impact on the British economy in the future. According to him these measures are preventive since Britain is in the middle of the serious crisis now.

Debates about monetary policy are still going on in the UK. Thus, Mr. Bean noted last week, that, as the result of QE program, the level of inflation can rise by 0.5%; however positive effect of the incentive program is that GDP will get additional +0.5%.

Volume of retail sales BRC in the UK increased by 0.3 y/y in September. Thus, according to the survey of the British Consortium of Retailers volume of retail sales rose slightly on annual basis last month; however monthly dynamics is mixed. It became known earlier that consumer confidence index Gfk in the UK fell to -32 points in October against the forecast of -30 points. Thus, the level of confidence of British consumers fell to 32-month low.

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